Status as on- 04/06/2022
The Insolvency & Bankruptcy Code [As amended up to date], 2016 [IBC] along with the Real Estate Regulation & Development Act, 2016 [RERA] has paved way for most of the grievances of the homebuyers. On one hand where RERA looks solely after the cases of homebuyers and builders, the IBC, on the other hand, provides for the rehabilitation/restructuring of the builder through the corporate insolvency resolution process.
As a matter of fact, and law every application/petition is governed by a limitation period; within which the same has to be filed before a competent court of law. Consequently, the same is also applicable for the cases of homebuyers and the period of limitation has been defined as three years. That is to say when a cause of action arises or in other words when the possession is defaulted by the builder, the cause of action arises to file a case/complaint.
A major curiosity/question that arises is that, given the period of three years from the cause of action, if a homebuyer failed to file his/her case then will his/her case will not be taken and his grievances won’t be solved? The answer to this question is “NO”! The reason here is that the limitation period in the case of a homebuyer is continuous in view of the non-handing over of the possession of the unit.
In clear terms, the cause of action or default in a case of homebuyers arises only when the agreed/promised date of possession as per the builder buyer agreement has lapsed and the possession is not handed over. Given the fact that the default is for the date of possession only, the limitation for the said period does not ends because the date of possession does not arrive, until & unless the project is completed and the possession is handed over to the homebuyer.
Thus, in the cases of homebuyers, a complaint/application/petition can be filed any time before the possession of the unit is handed over as per the duly executed builder buyer agreement. This is particularly relevant for the cases being filed under Section 7 of the Insolvency & Bankruptcy Code [As amended up to date], 2016 where limitation is a big question for the admission of the cases.
This is a well-settled law as has been held by the various court(s) of law in their judgments. A few of them are:
- B. Venu Madhav Vs. National Consumer Disputes Redressal Commission, represented by its Registrar, New Delhi & Ors, in W.P.No.30394 of 2011, dated 18.01.2012, reported in CDJ 2012 APHC 421, wherein it was held that when there is immovable property and the amenities promised by the opposite party were not provided, the National Commission held that it can be construed as continuing cause of action and it cannot be said to be barred by time.
- Meerut Development Authority vs. M.K. Gupta IV (2012) CPJ 12, wherein the Hon’ble Supreme Court held that in such a case the buyer has a recurrent cause for filing a complaint about non-delivery of possession of the plot.
- Satish Kumar Pandey & Anr. v. M/s Unitech Ltd. 2015 (3) CPJ 440 (NC), wherein it was held by the Hon’ble National Consumer Dispute Redressal Commission that It is now settled legal proposition that failure to deliver possession being a continuous wrong it constitutes a recurrent cause of action and, therefore, so long as the possession is not delivered to him the buyers can always approach a Consumer Forum.
From the above-mentioned findings it can be concluded that the limitation in the cases of homebuyers is purely on the basis of the delivery of the possession of the unit purchased, in case the possession is not handed over the limitation to file a case against the same becomes continues/recurrent till its delivery.
Disclaimer- The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us.